WAEC Economics 2020 Paper

Concept:Price elasticity of supply measures how responsive quantity supplied is to a price change.It is calculated as: $\frac{\%\ \text{change in quantity supplied}}{\%\ \text{change in price}}$.Explanation:Old quantity supplied = $200$ units.New quantity supplied = $250$ units.Change in quantity supplied = $250 - 200 = 50$ units.Percentage change in quantity supplied = $\frac{50}{200} \times 100 = 25\%$.Given percentage change in price = $12.5\%$.Therefore, price elasticity of supply = $\frac{25\%}{12.5\%} = 2$.Answer:The price elasticity of supply is $2.00$.Correct option: A. $2.00$.